Apple CEO Tim Cook, along with the company’s finance boss Peter Oppenheimer and Tax Operations head Phillip Bullock, earlier this morning took the witness table at a congressional hearing on Capitol Hill to face U.S. senators who grilled the three men on Apple’s offshore tax practices.
This also means today was the day many Apple bloggers got to become experts on tax reform. We live-blogged the whole thing, but if you had better things to do than sift through the back and forth between Apple execs and senators John McCain and Carl Levin, Apple’s got you covered.
Right on cure, the Cupertino firm has published Cook and Oppenheimer’s opening statements that detail its now widely reported stance on a comprehensive U.S. corporate tax code reform…
To get you up to speed, Senators McCain and Levin did their best to accuse Apple of cheating the U.S. tax system by funneling earnings made overseas through its subsidiaries in Ireland, where the company pays ridiculously low tax rates.
However, the fact remains that a bunch of corporations – including Coca-Cola and Microsoft – resort to the very same tactics in exploiting loopholes in the U.S. tax system.
In case you missed it, the subcommittee yesterday published a blistering 40-page retort which details a probe into Apple’s offshore tax havens.
As if that weren’t enough, the subcommittee’s chairman Carl Levin ahead of the hearing issued an unapologetic media release that accused Apple of seeking “the Holy Grail of tax avoidance” by creating “offshore entities holding tens of billions of dollars, while claiming to be tax resident nowhere.”
Here’s a notable excerpt:
We intend to highlight that gimmick and other Apple offshore tax avoidance tactics so that American working families who pay their share of taxes understand how offshore tax loopholes raise their tax burden, add to the federal deficit and ought to be closed.
Perhaps unsurprisingly, Tim Cook made no apology today for his company’s tax strategy and escaped from Washington pretty much unscathed.
Apple on its part remains adamant that the U.S. corporate tax of a whopping 35 percent on repatriated earnings is simply too high. Not only that, the outdated tax system can’t keep up with the digital age and is thereby reducing the competitiveness of the U.S. economy, the iPhone maker argued.
Ahead of today’s hearing, Apple yesterday published a 17-page document which outlines its push for a fair tax reform. According to that written statement, which Apple quoted in today’s hearing, the company is proposing a revenue neutral tax reform.
Uncle Sam should eliminate all corporate tax expenditures, Apple argues, while lowering corporate income tax rates and implementing a reasonable tax on foreign earnings that allows free movement of capital back to the U.S.
If you have time, C-SPAN has the full video of Apple’s testimony.
You may also want to read opening statement of Senator Carl Levin and John McCain or check out full testimonies of Apple’s Tim Cook, Peter Oppenheimer and Phillip Bullock.
Also available online: full depositions of Mark Mazur, Assistant Secretary for Tax Policy for the U.S. Department of the Treasury, Samuel Maruca, Director, Transfer Pricing Operations, Large Business & International Division with Internal Revenue Service and professors Richard Harvey of Villanova University School of Law and Steven Shay of Harvard Law School.
Image top of post via Reuters.